Vast opportunities are available for Australia to export financial services to Asia and attract foreign investment, but the financial system inquiry’s interim report suggests the nation still has a way to go to make inroads.

The document referenced prior inquiries into international financial integration, although it labelled subsequent efforts to implement changes as slow.

“Government has generally responded positively to these recommendations, but implementation has been slow and is not always well coordinated across government, regulators and industry," the report says.

Without calling for sweeping changes, the report suggests amending the role of an existing body such as the Financial Sector Advisory Council or setting up an industry-led body to “promote accountability" and provide economy-wide advice to the government on fostering closer financial ties offshore. It wants feedback on how that body or group would be funded.

The report noted the Asian Funds Passport was a significant first step, and noted myriad other opportunities in Asia including the liberalisation of China’s capital account. But the data cited showed the size of the opportunity, with foreign investment in managed investment schemes just 3.4 per cent in Australia, compared with more than 60 per cent in Hong Kong and 80 per cent in Singapore. The financial services sector was the largest in the domestic economy in 2012-13, but accounted for just 4.5 per cent of total trade in services.

A chart showed Australia ranked in the middle of the pack when measured against other countries on gross stocks of foreign assets and liabilities as a ratio to gross domestic product.

The report says government engagement was necessary for further international integration, and various regulatory processes or other impediments may need to be revisited in order to bring about progress.

It noted, however, that it did not support market intervention, or tax subsidies and concessions.

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“They identified the issues well," said Fariborz Moshirian, director of Institute of Global Finance at the University of NSW. “Implementation will be the key issue ... and how much Australia can do to fast-track financial de-regulation" in the region. The exposure of all Australian-owned banks to Asia was $142 billion as at September, up six fold from a decade earlier, the report says.